Port Authority OKs deal to finish 3 World Trade Center tower

By SHAWN BOBURG

Staff Writer |

The Record

The Port Authority on New York and New Jersey paved the way for construction of a private 80-story office tower at the World Trade Center site in Manhattan on Wednesday and agreed to provide free wireless Internet access at the region’s major airports.

Mitsu Yasukawa / Staff photographer

Members of The Port Authority of New York and New Jersey's board of commissioners and other officials during Wednesday's meeting.

At the bi-state agency’s monthly meeting, officials also parried questions about the 2011 decision to divert $1.8 billion of Port Authority money to four New Jersey state road projects, including the Pulaski Skyway, at the behest of the Christie administration. The Manhattan District Attorney’s Office and the U.S. Securities and Exchange Commission are looking into whether the funding agreement was legal.

“The matter is under investigation and as with all matters under investigation, we’re not commenting on it,” said Executive Director Pat Foye.

Nearly six months after the George Washington Bridge lane-closure scandal erupted, and with multiple investigations under way, the Port Authority remains dogged by controversy. But officials seemed eager Wednesday to tout what they said were accomplishments.

The agency’s commissioners agreed to a long-disputed deal with private developer Larry Silverstein that will allow construction of 3 World Trade Center to move forward. Over recent months, previous financing proposals had prompted division among commissioners, some of whom said those plans gave Silverstein too much public money.

The deal approved Wednesday, officials said, limits the Port Authority’s exposure and is largely similar to a 2010 agreement between Silverstein and the agency. But under the new terms, Silverstein, who leased the Twin Towers months before the 9/11 attacks, would get $159 million of insurance money that is intended for the site but is jointly controlled by the agency and Silverstein, officials said. Under the 2010 deal, the $159 million was to be reserved to cover any cost overruns.

Releasing the money up front, $50 million of it immediately, will be enough to allow Silverstein to get private financing and jump-start construction of the $2.3 billion tower, expected to be completed in 2018, officials said.

The remainder of the money would come from the sale of tax-exempt bonds, private loans and insurance proceeds — as well as $210 million previously promised by New York City and state.

The agency also approved a plan that would provide a half-hour of free Wi-Fi at the region’s major airports by the end of the year.

But those decisions were partially overshadowed by questions about the ongoing Pulaski Skyway controversy.

The Record reported in March that Port Authority attorneys expressed doubts in late 2010 and early 2011 about the legality of diverting agency money to four New Jersey road projects, including the skyway, because the projects had no connection to the agency’s facilities, as required by law.

But after pressure from Christie administration officials, the attorneys justified it by describing them as access roads to the Lincoln Tunnel, according to internal documents, even though they are miles away and do not connect directly to the tunnel.

The investigations are focusing on whether the Port Authority misled bondholders and investors who agreed to lend the agency money for the construction projects on the condition that |they were legally authorized, sources have said. Several members of the public, including New Jersey Sen. Loretta Weinberg, mentioned the controversy during the public comment portion of the meeting.

Weinberg was at the meeting to chastise the agency for conditions at its outdated and cramped bus terminal in midtown Manhattan. About one quarter of the agency’s spending on its tunnels and bridges and bus terminals, she said, is instead being directed to the New Jersey state road projects.

Port Authority officials vowed they would discuss options for fixing or replacing the bus terminal — currently not in their 10-year plan — at their meeting next month.

Meanwhile, Foye, the executive director, brushed aside reporters’ questions about whether the New Jersey state roadways could accurately be described as access roads to the Lincoln Tunnel.

“That’s a geographic and legal question,” said Foye, who was not yet at the Port Authority when the initial agreement was forged between the agency and the New Jersey Department of Transportation. “I’m going to leave the legal question to the lawyers.”

Port Authority OKs deal to finish 3 World Trade Center tower

Members of The Port Authority of New York and New Jersey's board of commissioners and other officials during Wednesday's meeting.

By SHAWN BOBURG

Staff Writer |

The Record

The Port Authority on New York and New Jersey paved the way for construction of a private 80-story office tower at the World Trade Center site in Manhattan on Wednesday and agreed to provide free wireless Internet access at the region’s major airports.

At the bi-state agency’s monthly meeting, officials also parried questions about the 2011 decision to divert $1.8 billion of Port Authority money to four New Jersey state road projects, including the Pulaski Skyway, at the behest of the Christie administration. The Manhattan District Attorney’s Office and the U.S. Securities and Exchange Commission are looking into whether the funding agreement was legal.

“The matter is under investigation and as with all matters under investigation, we’re not commenting on it,” said Executive Director Pat Foye.

Nearly six months after the George Washington Bridge lane-closure scandal erupted, and with multiple investigations under way, the Port Authority remains dogged by controversy. But officials seemed eager Wednesday to tout what they said were accomplishments.

The agency’s commissioners agreed to a long-disputed deal with private developer Larry Silverstein that will allow construction of 3 World Trade Center to move forward. Over recent months, previous financing proposals had prompted division among commissioners, some of whom said those plans gave Silverstein too much public money.

The deal approved Wednesday, officials said, limits the Port Authority’s exposure and is largely similar to a 2010 agreement between Silverstein and the agency. But under the new terms, Silverstein, who leased the Twin Towers months before the 9/11 attacks, would get $159 million of insurance money that is intended for the site but is jointly controlled by the agency and Silverstein, officials said. Under the 2010 deal, the $159 million was to be reserved to cover any cost overruns.

Releasing the money up front, $50 million of it immediately, will be enough to allow Silverstein to get private financing and jump-start construction of the $2.3 billion tower, expected to be completed in 2018, officials said.

The remainder of the money would come from the sale of tax-exempt bonds, private loans and insurance proceeds — as well as $210 million previously promised by New York City and state.

The agency also approved a plan that would provide a half-hour of free Wi-Fi at the region’s major airports by the end of the year.

But those decisions were partially overshadowed by questions about the ongoing Pulaski Skyway controversy.

The Record reported in March that Port Authority attorneys expressed doubts in late 2010 and early 2011 about the legality of diverting agency money to four New Jersey road projects, including the skyway, because the projects had no connection to the agency’s facilities, as required by law.

But after pressure from Christie administration officials, the attorneys justified it by describing them as access roads to the Lincoln Tunnel, according to internal documents, even though they are miles away and do not connect directly to the tunnel.

The investigations are focusing on whether the Port Authority misled bondholders and investors who agreed to lend the agency money for the construction projects on the condition that |they were legally authorized, sources have said. Several members of the public, including New Jersey Sen. Loretta Weinberg, mentioned the controversy during the public comment portion of the meeting.

Weinberg was at the meeting to chastise the agency for conditions at its outdated and cramped bus terminal in midtown Manhattan. About one quarter of the agency’s spending on its tunnels and bridges and bus terminals, she said, is instead being directed to the New Jersey state road projects.

Port Authority officials vowed they would discuss options for fixing or replacing the bus terminal — currently not in their 10-year plan — at their meeting next month.

Meanwhile, Foye, the executive director, brushed aside reporters’ questions about whether the New Jersey state roadways could accurately be described as access roads to the Lincoln Tunnel.

“That’s a geographic and legal question,” said Foye, who was not yet at the Port Authority when the initial agreement was forged between the agency and the New Jersey Department of Transportation. “I’m going to leave the legal question to the lawyers.”